Andrew Barnes

Our speaker on 9 August was Andrew Barnes founder of Perpetual Guardian which is an amalgamation of perpetual Trustees a South Island trustee company and the New Zealand Guardian trust Co Ltd.

Andrew was a director and founder of Just Wills Holdings Limited may multinational will writing and estate planning business. Prior to that he was involved in investment management and advice with Best invest, a UK management company and also Australian Wealth Management Limited.
Andrew has moved Perpetual Guardian away from providing financial advice and Wealth Management and returned the company to a fiduciary services model.

In his presentation to the club and refocused on to elements first the need for people to prepare wills to deal with their estates as they would wish rather than having their estates distributed in the absence of a well through the mechanism set out in the administration at 1969. Andrew told us that 70% or so of people and 40 do not have Wills which in some situations in the case of sudden death can cause difficulties when the provisions of the administration and are invoked. He also commented on the difficulties rising when there are blended families and the increasing frequency of challenges to wills if they have not been carefully drawn.

He commented that the law of wills and trusts hasn’t changed significantly since the 13th century, notwithstanding the enactment of the Wills Act 2007and the ongoing changes promoted by the Law Commission to the law of trusts. The point Andrew was making was that technology has taken control of our lives and that such technology should and can be used for the preparation of wills and the execution of them.

Conventional wills require a will maker to sign the document and initial each page in the presence of 2 witnesses. He offered the question what is to stop a digital will being signed in the presence of people online or using cell phone messaging. In other words preparation and execution of wills needs to get up with the times.

Andrew’s chief point was that there was no excuse not to have a will and there is no excuse for intestacy in New Zealand.

Perpetual Guardian is pushing government to change the rules regarding KiwiSaver so that a option to make a will is provided with every new KiwiSaver account.

Andrew is an enthusiastic philanthropist. Perpetual Guardian gives away about $40 million a year from the various (650) charitable funds it manages. Andrew made the point however that there is a serious disconnect between previous generations who set up charitable entities and the current generation for whom “give a little” pages are all they know of charity.

The 650 charities mentioned above all established many years ago. As a consequence many have quirks which mean that charitable distributions cannot be made as a strict provisions of the trust deed cannot be followed. Andrew gave us the example of a charity in Christchurch which provides for a scholarship for a medical student to attend Edinburgh University medical School. There haven’t been applicants for that scholarship for many years because, as Andrew pointed out, Otago University Medical School is just down the road.

Andrew also noted that bequests and wills to charities are flatlining. There are about $150 million per annum paid in bequests to charities but as a percentage of money being transferred from one generation to the next it is declining. Likewise payroll giving. In 2013 payroll giving totalled $5.8 million per annum. Now there is little if any payroll giving.

This is the challenge. There are gaps opening up between the elite and those who don’t participate in improvements in the economy. If we don’t do anything there will be a societal change. Andrew commented that Brexit it is a clear example of what happens when business separates itself from the rest of society. In other words the business elite in London lost contact with the rest of England bringing about the surprising to some vote for Brexit.

Andrew says that it is critical that companies look at what they do. As well is make money giving is an option.

Andrew suggests that companies need to lead the way in making charitable contributions to society. The challenge is to make everyone and every entity in this country are philanthropist.

Andrew also made the comment that there are too many charities in New Zealand. There are more charities per capita than any other country which is not sustainable. As noted above many long established charitable foundations are really not for purposes our limited in what they can do by their governing trust deed. The cost of changing the purpose of a charity is expensive as it involves court proceedings significant time and most importantly great cost. There needs to be in Andrew’s view flexibility to enable the proper uses of charitible funds as society evolves.

Andrew said that Perpetual Guardian is pushing the government to make changes particularly to trust law to enable this flexibility. It is a long and difficult process however.

Andrew’s address was thought-provoking and interesting, especially for the lawyers present.

There are interesting times ahead for philanthropy in New Zealand as society changes.

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